Media and crisis management is the most visible side of PR. But most of WHAM’s work involves sustained behind-the-scenes work, helping our clients communicate effectively with their customers, staff and other stakeholders. More…

06 November 2009

Groser needs to take his message back to the Hutt

Tim Groser can see the future, but he needs to communicate it better

Trade
minister Tim Groser's urbane manner has been polished over many years working
as a diplomat and senior government trade negotiator. But as a former student
of Hutt High School, his roots are urban Kiwi.

Getting
back to those roots and finding ways to communicate with ordinary New
Zealanders the realities of a rapidly changing world needs to be a higher
priority in his already busy schedule. In a largely unreported speech to
Federated Farmers earlier this week, he spelled out what some of these
fundamental changes will mean for farmers and by extension for all New
Zealanders.

The
challenges involved in getting those messages across cannot be under-estimated.
Even Federated Farmers, which heard the speech first-hand, has chosen to ignore
his message that farmers must play their part in combating climate change or
face consumer-led trade barriers in world markets.

Groser
describes the prospects for our farm-based exports as a "good news story on
steroids". Growth in the world population combined with rapid economic growth
in many developing countries, and constraints on land and fresh water supply in
many countries, means that demand for New Zealand's protein products will
continue to grow in the years ahead.

At the same time there are vastly
improved trading opportunities for our exports as a result of recently
negotiated and pending free trade agreements.

But to tap this vast potential, we need
to get our heads around the demands of our new consumers in Asia. Perhaps even
more importantly, we also need to come to grips with changing consumer
attitudes in our established markets in Europe and North America. Groser
describes this as "the customer as the new trade regulator".

Food
miles was the first concrete reminder that in this new sophisticated world we
might face trade barriers that were not imposed by governments but by our
customers - or more precisely, by companies like Tesco and Walmart who are the
commercial interface with our customers.

In this case,
it was a perceived product quality/value issue around climate change: the
customer should seek out food produced closer to home on the rather primitive
and usually wrong assumption that such food would be more ‘climate friendly'.

The food
miles phenomenon arguably heralded a shift from agreements between nation
states to agreements between producers and retailers. Global retailers are
incredibly powerful in the market because they control what products reach
consumers in practically all developed nations ... key areas of risk include
animal husbandry practices, and also perceptions of the environmental impact of
farming.

"These
concerns, regulation and market imperatives mean that farmers have to manage
their compliance with various standards and codes of practice that are aligned
with international expectations ... this is both an opportunity and a risk for
New Zealand," says a Dairy NZ paper quoted by Groser.

He then
cites the largest company in the world - Walmart - which is putting in place a
Sustainability Index based on complex matrix containing key supply chain
processes and then factors in impacts on natural resources, something called
‘people and the community' and energy/climate change.

A few
months ago British supermarket chain Waitrose banned fish deemed to be either
over-fished or harvested by what they considered were irresponsible fishing
methods, including bottom trawling. Now bottom trawling happens to be the
method of extraction for New Zealand hoki. So our hoki were banned.

"Presumably
the supermarket's costs went up and they were unable to find alternative
suppliers of some species such as swordfish, so did they suffer commercial
consequences? Nope: it was a huge commercial success.

"According
to NZTE research, the idea of buying only sustainably managed fish proved so
popular with their customers that they moved within a few months from having 4%
of the British retail market for fresh fish to having 10% market share. As for
NZ hoki, our problems became compounded when the Wall Street Journal took
up the issue with an oped targeted at NZ hoki entitled ‘From the Deep Pacific:
Ugly and Tasty with a Catch'. The NZ Seafood Industry has worked overtime to
counter this. Frankly, we don't need reputational risk like this," he says.

After citing
environmental sourcing initiatives by McDonalds and other major marketing
chains that buy produce from New Zealand, Groser addresses climate change.

"First of
all, I know some of you, maybe many of you, don't really believe NZ should take
this issue seriously and in particular believe NZ agriculture should be left
out of any climate change response by government.

"For a
country that depends on trade and its customers, what sounds common sense to
you? The rest of the world is saying ‘let's go down this road' but NZ says ‘no,
no. we're going down that road. We think you are wrong'. Does that sound like
even half way real? Not to me. Perhaps we should ask the guys at McDonalds and
Walmart to give us their view?

"Now I
know there are complex issues around climate change and the role of
agriculture. But we have to have some balance here. I don't think it is in NZ's
agriculture trading interests just to try and wish this away.

"The risk
is not that if we do not come on board climate change, the EU or the United
States are going to erect new barriers to NZ agricultural exports in the next
few years. But that could turn out to be real in say, 5-8 years time if the NZ
Government were, to be frank, stupid enough to opt out of all climate change
obligations.

"The real
risk is not about governments. It is that our customers, or rather the
retailers that make the crucial decisions on sourcing, may walk away from New
Zealand over environmental, climate change or production processes and methods.
That is a real risk. Don't treat it lightly.

"We need
to have integrity right throughout the supply chain. It won't be achieved
easily and we will have to live with inconsistencies as we seek to close the
gap between the objective of 100% Pure and current practices of some of our
producers who just want to shut their eyes to this challenge."

In WHAM's
view, it is vital that Groser's understanding of changes in world markets and
what that means for New Zealand as an agricultural product exporter is
communicated to all New Zealanders.

In
essence, the country needs to recalibrate its image of itself as a sturdy
producer of farm products for commodity markets, to one in which we see
ourselves as producers of sophisticated products designed to meet the needs of
affluent consumers whose attitudes and lifestyles may be very different from
our own.

If a company doesn't
understand or identify with its customers, it is very unlikely to succeed. The
same could be said of our country and its major primary industries.